GET IT IN WRITING: A CAUTIONARY TALE
Any chronicle of the art market would contain a wealth of cautionary tales, including several with the familiar moral, "Get it in writing!" The maxim is roundly endorsed by Francis M. Naumann, the Duchamp scholar who in 2001 opened his own gallery on the top floor of the Fine Arts Building on East 80th Street in Manhattan, which is also home to the gallery of Naumannís identical twin, the Old Master dealer Otto Naumann. In his gallery, Francis Naumann has specialized in contemporary and modern works -- he has put on exhibitions of paintings by Sophie Matisse and Damien Elwes, and recently showed a group of sketchbook drawings by Joan Mitchell.

Naumann also does his share of secondary market deals, and it is in one of these transactions that he learned his lesson -- the hard way.

The deal was star-studded. It involved a rare, early oil painting by Marcel Duchamp; a rock star collector, John Frusciante, lead guitarist of the Red Hot Chili Peppers; and several art dealers, notably Nicholas H. Ekstrom, whose father was a principal in the venerable Cordier & Ekstrom gallery and who currently operates Ekstrom & Ekstrom Gallery on East 75th Street. The tale even boasts a cameo by the young socialite Stella Schnabel, daughter of superstar painter Julian Schnabel.

It all started back in 2003, when Frusciante and Stella Schnabel turned up at Michael Werner Gallery on East 77th Street in the Upper East Side, in search of a painting by Duchamp -- not something that is easy to come by, since Duchamp abandoned painting rather early in his career. Frusciante, it turns out, is a Duchamp fanatic, and had bought several works by the artist from a 1999 exhibition that Naumann had organized at Achim Moeller Fine Art on East 73rd Street in Manhattan -- including the Duchamp masterwork, Box-in-a-Valise (for about $125,000), and some Roto-Reliefs (for around $20,000).

In this instance, the Werner Gallery didnít have what Fusciante was looking for, and gallery director Gordon VeneKlasen called Naumann, saying that he had an (unidentified) collector in the market for a prominently signed Duchamp painting, and that a price of around $1 million wouldnít be out of the question.

Naumann, the curator of "Dada in New York" at the Whitney Museum in 1995 and the author of Marcel Duchamp: The Art of Making Art in the Age of Mechanical Reproduction (Abrams, 1999), made some calls, and determined that Ekstrom had Duchampís Clémence on offer for $750,000.

An Impressionist-Fauve oil-on-canvas of the family maid, Clémence measures about 24 by 20 inches and was painted in 1910, when Duchamp was 23. The work had been in the possession of Arne Ekstrom -- Nicholas Ekstromís father, and the proprietor of Cordier & Ekstrom Gallery -- at least since Ekstromís 1965 Duchamp show. Naumann notes that the exhibition catalogue identifies the work as coming from the collection of Mme H. P. Roché in Paris, and believes that the senior Ekstrom had bought it from her. Though the dealer had the painting hanging in his home, Ekstrom was interested in selling it. "In the late 1980s, he wanted $1 million," Naumann said, "which was impractical back then."

Naumann phoned Nicholas Ekstrom and told him that he was sending a client over to look at the picture, via the Werner Gallery. Naumann never had the Duchamp work in his possession, nor did he ever meet the client. After a certain amount of negotiating with Ekstrom, Frusciante purchased the painting.

This is where the story gets interesting. As the agent who brought together the collector and the artwork, Naumann was expecting to receive a "finderís fee" on the transaction, a sum that Naumann put at 10 percent, or $75,000. In his phone call with Ekstrom, Naumann remembers referring to the potential sale, saying, "If something happens, donít forget me. I trust you."

But Ekstrom remembers the conversation differently. He declined to pay Naumann a commission, saying that Naumann had agreed to waive his fee. "I can practically hear your exact words," Ekstrom wrote to Naumann in a letter dated Oct. 6, 2003 (which has been supplied to Artnet News by Naumann). "ĎI donít want anything out of it.í I was quite astonished by your generosity."

Whatís more, according to Ekstromís letter, Fruscianteís original offer for the painting was "inadequate, not to say insulting," and therefore Naumann was hardly "owed a commission on an unproductive introduction and a failed sale." Subsequently, Ekstrom wrote, the Dada dealer Timothy Baum spent considerable time convincing VeneKlausen of the value of Clémence, advised Ekstrom on the negotiations over the picture and "helped bring them to a successful conclusion." The commission on the referral, if any, would belong to Baum, Ekstrom wrote.

Naumann says that he certainly did not waive his right to a commission (and notes that the introduction clearly was "productive"). Indeed, as he explained to Ekstrom in a letter of Oct. 1, 2003, "Commissions are the primary source of income upon which I rely to remain in business." Naumann says that he and Ekstrom had done business before, and that Ekstrom had at least twice paid him a 10 percent finderís fee, including a $1,500 commission on the sale of Duchampís A líInfinitif to the Yale University Art Gallery for $15,000. None of these deals involved written agreements; Naumann's fee was paid on the basis of a verbal arrangement.

At this point, according to Naumann, the two parties attempted to negotiate a settlement through their lawyers. Ekstrom offered $5,000, but Naumann declined. "I considered it insulting," he said.

Last summer, Naumann took legal action, filing a complaint in New York State Supreme Court. To support his action, Naumann obtained affidavits from several art dealers, including Josh Baer, Kimberly Venardos and Lawrence Steigrad, who all agreed that the 10 percent finderís fee was typical in the art business. "The practice of paying commissions to agents is so commonplace within the profession," the statement says, "that a 10 percent commission is presumed," with the exception of "exceedingly expensive (over $1,000,000)" works, in which the commission is negotiated.

Judge Rolando T. Acosta of New York State Supreme Court, however, remained unswayed by Naumannís arguments. In his two-page decision, filed in January of this year, he dismissed Naumannís action. The alleged oral agreement between Naumann and Ekstrom, the judge said, was within the ambit of the Statute of Frauds, which requires that such agreements -- including negotiating the purchase or sale of a "business opportunity" -- be in writing. Absent a written agreement, "so easily obtained," the judge wrote, "the agreement is unenforceable."

Naumannís attorney, Paul Hugel of the firm Clayman & Rosenberg, had argued in the case that the Statute of Frauds applied only to large-scale transactions involving entire businesses, not to the sale of individual items in a businessí stock. In this case, the judge clearly disagreed. "The actual wording of the statute is ambiguous," Hugel told Artnet News in an email, "and some courts have interpreted it rather more broadly than the legislature probably intended." It would be prudent in such cases, Hugel noted, for participants to outline the deal in writing.

Judging from this example, individuals who earn their living by acting as agents, consultants and advisors should take steps to secure their oral agreements in writing." When a person tells you that no written contract is necessary," Naumann said in a final, cautionary note. "Thatís exactly the moment you should seize to get one."